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Definition: EDI

(Electronic Data Interchange) The electronic communication of business transactions, such as orders, confirmations and invoices, between organizations. Third parties provide EDI services that enable organizations with different equipment to connect. Although interactive access may be a part of it, EDI implies direct computer-to-computer transactions into vendors' databases and ordering systems.

The Internet gave EDI quite a boost. However, rather than using privately owned networks and the traditional EDI data formats (X12, EDIFACT and TRADACOMS), many business transactions are formatted in XML and transported over the Internet using the HTTP Web protocol. See X12, EDIFACT, TRADACOMS, extranet, externalization, XML and HTTP.